The mortgage banking industry is backing a legislative proposal that would limit the government’s use of the False Claims Act to pursue hefty damages against FHA lenders. In a recent letter to the bill’s co-sponsors, the Mortgage Bankers Association expressed its strong support for H.R. 5993, the Fixing Housing Access Act of 2018. The MBA noted that originating FHA-insured loans has become very risky in recent years largely due to the civil actions brought by the Department of Justice under the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989. Fifty-four FCA and FIRREA cases against financial institutions have settled for billions of dollars between July 2011 and January 2018, according to data compiled by the Buckley Sandler law firm. Four cases are pending and one civil penalty award was reversed on appeal. Those lenders who were on the ...

Black Knight Financial Services, which currently collects all servicing data for VA, will no longer do the job after March 2019, according to the Department of Veterans Affairs. BKFS will stop providing the service when VA transitions to a new enhanced VALERI system. VA servicers currently use the VA Loan Electronic Reporting Interface system to upload servicing information. VALERI is undergoing a multi-phase restructuring for conversion to a fully automated system spanning loan application, origination and servicing. The enhanced servicing component of VALERI will be ready by late spring next year. As part of the transition, VA will ensure that all servicers are plugged into the new VALERI system before it becomes fully operational. VA’s transition plan covers all methods and procedures for reporting information to VALERI. These include use of a licensed servicing system or a proprietary in-house servicing system that automatically reports data to VALERI, or logging into the VALERI web portal to manually upload and enter data.

The D.C. circuit decision involving PHH Mortgage and Sec. 8 of the Real Estate Settlement Procedures Act should lead the CFPB to rethink its 2015 guidance on marketing services agreements, industry groups say. The CFPB under former director Richard Cordray issued guidance suggesting that many MSAs are designed to evade RESPA’s prohibition on the payment and acceptance of kickbacks and referral fees. “What the bureau did was to create an impression that it would ...

A House Republican asked the CFPB to stop so- called regulation by enforcement and to clarify the use and role of the guidance it has issued. Rep. Blaine Luetkemeyer, R-MO, recently sent a letter to six agencies, including the CFPB, expressing concerns that guidance that does not go through notice-and-comment rulemaking has been used as the basis of enforcement actions. “Many of my colleagues and I hear frequently from financial institutions that guidance promulgated ...

President Trump last week nominated Kathy Kraninger, a little-known White House budget official, to head the CFPB. The nomination has set the stage for a contentious Senate confirmation process. Most observers were surprised by Trump’s CFPB pick as Kraninger’s name has never come up in public discussion of possible nominees to become the next director of the bureau. The first question for many was: Who is Kathy Kraninger? The nominee currently serves as ...

t is still a big question mark how Kathy Kraninger, President Trump’s nominee to head the CFPB, will perform in Senate confirmation hearings. But the widely different reactions from Republican and Democratic lawmakers signal a contentious and drawn-out process. The White House last week officially sent the nomination of Kraninger to the Senate. The Senate Committee on Banking, Housing, and Urban Affairs will hold a hearing on the nominee, which could ...

The CFPB fined a South Carolina-based installment lender $5 million for unlawful debt collection practices, including threatening consumers with jail, shoving them and physically blocking a consumer from leaving private property. It is the second enforcement action since Mick Mulvaney, the White House budget director, took the reins of the CFPB last year. The Security Group and its subsidiaries own and operate approximately 900 locations in 20 states across the country ...

CFPB oversight has not significantly reduced the volume of mortgage originations, but it has changed the kinds of loans being made, the Federal Reserve Bank of New York found. Critics of the CFPB have argued that its activities increased compliance costs and ultimately reduced the availability of financial services to consumers. However, a recent New York Fed staff report found there’s little evidence supporting that theory in the mortgage business. The market share of ...

The CFPB is expected to move more quickly to reconsider its payday-lending rule after a federal court denied the delay of the rule’s compliance date that had been requested in a joint motion filed by the CFPB and two trade groups. Two payday-lending trade groups – the Community Financial Services Association of America and the Consumer Services Alliance of Texas – in April filed a lawsuit in Texas federal district court, alleging the agency’s payday-lending rule is unlawful ...

Lawsuits brought by cities with allegations of violations of the Fair Housing Act (FHAct) by lenders are continuing after a decision by the U.S. Supreme Court with a mixed message for lenders.